Poverty in India Part - 1
The blog makes an effort to present social aspects of poverty, starting with its regional, caste-based, and gender-based dimensions. The module also discussed the reasons of poverty in India, paying particular attention to inequality, unemployment, and subpar results across a range of industries, including agriculture and industry. In addition, the post discusses government efforts to end poverty through development programmes as well as price increases and inflation as one of the main causes of poverty.
Content
- Regional Dimension of Poverty in India
- Caste Dimension of Poverty
- Gender Dimension of Poverty
- Social and Political Aspects of Poverty
- Underdevelopment cause of poverty
- Inequality
- Inequality of Income/Material Possession
- Inequality of opportunity
- Unemployment
- Summary
In India, poverty and deprivation are not evenly dispersed among the States and Union Territories; rather, it is concentrated in a small number of States, including Odisha, Bihar, the United Provinces, Jharkhand, and Chhattisgarh. According to the Rangarajan Committee's 2014 estimate, the poverty rate in India for the 2011–12 fiscal year is 29.5%, with the highest concentrations of poverty in Goa, Puducherry, and the Andaman Islands, where the rate is in the single digits and ranges from 6% to 7%. However, in some States, the poverty rate is between 40 and 45 percent of the state population, with Odisha at the bottom of the poverty scale at 45.9%, Madhya Pradesh at the second-bottom position at 44.3%, Jharkhand at the third-bottom position at 42.4%, and Bihar at the fourth spot with an estimated 41.3%. (Rangarajan Committee, 2014). If we look back a decade, the poverty rate at the national level in 2004–2005 was 27.5 percent. Uttar Pradesh, Orissa, Maharashtra, Madhya Pradesh, Bihar, as well as the recently formed states of Uttaranchal, Jharkhand, and Chhattisgarh, are the states and UTs having poverty rates that are higher than the national average. Orissa has the highest HCR of these, at 46.4%.
Caste Dimension of Poverty
The caste phase of poverty historically has been blatantly unchanged, manifesting as 88% of the poor and vulnerable groups were SCs and STs, with the majority of these poor people living in rural areas (NCEUS 2007). According to the Xaxa committee (2014), 42% of Indian tribal people live in poverty. The fifth Scheduled Area in Central and Eastern India contains 106 districts and is home to tribal communities who live in rural areas with hilly terrain. This area is one of nine States in India that are heavily affected by Left Wing Extremism (LWE) activities and North-Eastern India is heavily affected by conflicts and insurgencies (Raghuram Rajan Committee 2013 and Planning Commission 2008).
The policy of "noninterference and protection" of tribal lands has been credited with the institutional intervention that led to the creation of poverty alleviation programmes because it has protected tribal people from losing their primary source of income, which is their landholdings. In India, SCs and STs are thought to make up about two-thirds of the bonded labourers who are chronically impoverished and prone to the passing down of poverty from one generation to the next. This is true in both rural and urban areas. The rate of poverty is highest among STs, then SCs, and finally the other group. In particular, the HCR for STs is much higher than that of the SCs and more than twice that of the "others" category (48.02 vs. 23.23) in rural areas (38.38).
Gender Dimension of Poverty
Both in rural and urban areas, the prevalence of poverty among women has been slightly higher than that of their male counterparts. In urban regions, the corresponding percentages for females and men were 25 and 23, whereas in rural areas the corresponding percentages for females and males were 27 and 26 percent, respectively, as of 1999-2000. In both rural and urban areas, women made up slightly less than half (49%) of the poor. According to the Human Development Report, 70 percent of the world's population—1.3 billion people—live in poverty. The fact that poverty in India includes a gender component is demonstrated by the gender disparities in sex ratios, infanticide rates, literacy rates, health and nutrition, and access to productive resources, among other things.
Social and Political Aspects of Poverty
There is no one one factor that causes poverty. It is the result of numerous elements interacting, including social, cultural, economic, political, geographical, and a plethora of others. There is unquestionable unanimity that social issues are what cause poverty in India. It begins with the long-standing caste system, belief system, joint family system, gender disparities, and inheritance law, all of which were in-depth topics of discussion in preceding courses. In addition to these social dimensions of poverty, lack of entrepreneurship, insufficient access to social services including healthcare, education, and medical facilities, and illiteracy are all considered to be the main causes of poverty. A considerable chunk of people were generally excluded from the development process, particularly the disadvantaged members of the Scheduled Caste and Scheduled Tribal social groupings. In addition to the economic and social elements, politics is a major contributor to poverty. Exploitation persisted in the governance and administrative systems even after India gained independence from colonial governments. Even 70 years after independence, the democratic system does not appear to be effective in addressing the root causes of poverty. However, during the Plan era of development, efforts were made to end poverty. Although the Fifth Five Year Plan promoted the phrase "Garibi Hatao," Indian policymakers still find it difficult to understand how to reduce poverty. Thus, a number of factors contributed to India's poverty. Poverty in India is also a result of regional differences, a lack of investment, improperly implemented public policies, a lack of vocational education and training, rural-to-urban migration, and other factors.
Underdevelopment cause of poverty
In addition to the main causes of poverty, underdevelopment is seen as a crucial factor that is conspicuously present in underdeveloped nations. A significant section of the population struggles to achieve their basic needs as a result of underdevelopment. People's aggregate consumption and investment remain low due to the nation's low national income and per capita income, which has the effect of lowering people's standard of living. Early planning measures by the Indian government encouraged consistent growth rates in the country's economy, which are frequently referred to as Hindu rates of growth. Rajkrishna, an Indian economist, invented the phrase "Hindu rate of growth" in 1978 to describe the socialist economy's long-term low growth rate of 3.5%. It was unable to address the issue of poverty and lessen inequality. Even though the economy grew rapidly from the middle of 2000 onward, the poorer segments of society have not reaped the rewards. The gap between the rich and the poor is still widening. The population is still quite huge and continues to be one of the main causes of poverty even though the rate of expansion is slowing.
Inequality
Additionally, inequality—particularly income and wealth inequality—is a major contributor to poverty in India. In order to lessen the severity of inequality in India, the New Economic Policies initiatives in the last decades of the 20th century in 1991 represented a paradigm change in economic reforms along the lines of the Washington Consensus. However, the economic changes increased social inequality rather than eliminating it.
Inequality, which is defined as the state of not being equal, particularly in status, rights, and opportunities, has various aspects. Social justice theories are mostly based on the idea of inequity. The analysis of inequality tends to signify different things to different individuals, which causes misunderstanding in public discourse. However, some distinctions are universal. According to several authors, "economic inequality" refers to disparities in "income," "money," or, more broadly, "living situations." Others further identify an approach to inequality that is rights-based and legalistic—inequality of rights and related obligations (e.g. when people are not equal before the law, or when people have unequal political power). However, the main focus of inequality is on disparities in outcomes in the material aspects of wellbeing, which can be caused by both ability and effort in addition to external factors like race, family background, and gender. Ex-post or achievement-oriented thinking is used in this viewpoint. The second perspective is focused solely on external factors that have an impact on one's prospective outcomes and is concerned with opportunity inequality.
Inequality of Income/Material Possession
When people do not share the same degree of material wealth or general economic conditions, there is an inequality of outcomes. The majority of development theory's focus has been on disparities in living standards, including disparities in wealth, education, health, and nutrition. However, income or consumption has generally been the prism through which economists have evaluated progress on these fronts. In the past, income inequality was a topic of concern for development theory insofar as it affected or was affected by the rise in the average income of the country. The Gini coefficient or index (G), named after the Italian statistician Corrado Gini, is the most popular indicator of income disparity (1912).
The Gini coefficient has a value between 0 and 1, with 0 being perfect equality (all have the same income) and 1 being perfect inequality (all income earned by one person). In most countries, it ranges between 0.3 and 0.7. The Gini coefficient can thus be intuitively interpreted as the share of the total income (GDP) that has to be redistributed to hypothetically obtain perfect income equality. For example, a country with a relatively high inequality and G = 0.6 must take an equivalent of 60 % of its GDP from the rich and give to the poor to reaming 40 % of GDP. Another commonly used measure of inequality is the Kuznets ratio. This gives the ratio between the average income of the richest and the average income of the poorest – typically undertaken by focusing on the averages of the top and bottom quintiles, i.e., the richest 20 % and the poorest 20 %. This has a clear intuitive meaning: how many times richer are the rich compared with the poor? The Kuznets ratio typically varies from about five (5) for egalitarian European countries to more than thirteen (30) in some Latin American countries. Although popular, this measure is from a scientific viewpoint less satisfactory as compared to the Gini coefficient, because income changes in the middle range are ignored (e.g. a transfer of income within the 60 % in the middle would not affect the Kuznets ratio, but would change the Gini index)
Slowly, research started to indicate that while income inequality was bad for economic growth, growth had ambiguous consequences on inequality. Furthermore, a distributional bias in the economic process became clear as income inequality increased in many nations. The income inequality discussion was forced to centre on poverty reduction in the late 1990s because to shockingly high levels of poverty. Growth and equity (through income redistribution) were considered as independent policy instruments, both capable of tackling poverty, and pro-poor growth initiatives were introduced. The main focus was on increasing the incomes of low-income households. Growth and inequality could hardly be separated by the early 2000s, and the preceding decade's emphasis on fighting extreme poverty was seen as failing (indeed, there was progress in extreme poverty, but income inequalities were rising in many developing countries). There are now ways to growth that promote broadly shared prosperity and the extension of growth's disproportionate advantages to a larger proportion of the population (UNDP, 2013).
Inequality of opportunity
Amartya Sen's capacity framework introduced a new way of thinking about inequality in the late 1970s, emphasising the measurement of human well-being and inter-personal comparisons. However, Amartya Sen's capability approach to poverty has marked the biggest shift in the academic and public policy communities' intellectual trajectories. It has a significant impact on national and international efforts to eradicate poverty and advance the development agenda. There has been a paradigm shift in how development is understood, moving away from economic growth and GDP (UNDP, 1997). According to Sen's proposal, "well-being" should be defined and assessed in terms of the "beings" and "doings" that are valued by individuals (functionings) and the freedom to make decisions and take action (Alkire et al., 2015). (capabilities). In other words, he utilised the terms "functionings" and "capabilities" to represent his concept of capability. Former "functionings" refer to what a person can actually accomplish or be; later "functionings" refer to a person's skills, which can range from basic necessities like nutrition to more complex ones like community engagement and achieving self-respect. The options available to a person for their choice, which are not specified by Sen, could include a variety. According to Sabina Alkire (2002), Sen purposefully did not specify any capacities and left it up to the people to behave in accordance with their own ideals and reasons for doing so. This strategy places a strong emphasis on the freedom to select one way of living over another. According to this model, achieving income equality is not the best course of action because not everyone interprets money in the same manner when it comes to freedom and happiness. The individual's age, gender, family background, and handicap are just a few examples of the "contingent variables, both personal and social" (Sen, 1999) that appear to have a significant impact on this relationship. It also depends on the climate, societal issues (such as the health care system, educational system, crime rate, and interpersonal connections), customs, and convention. Therefore, what has to be equalized—rather than the means of subsistence—are the chances for subsistence that allow individuals to live the lives they choose.
When a person's ability to influence their own life results, rather than other people's unfavourable characteristics, there is equality of opportunity. It contends that factors like gender, ethnicity, family history, etc. shouldn't affect results. It actually exists when people receive some sort of compensation for their unfortunate circumstances. A situation in which people's economic circumstances are comparable is referred to as equality of outcome. While disparity of outcomes is concerned with the finish line and depends on both aptitude and effort in addition to circumstances outside one's control, inequality of opportunity is defined ex-ante and is concerned with assuring a shared starting point.
Unemployment
Another significant difficulty with development and a contributor to poverty in the Indian economy is unemployment. Although this issue was present in the past, it only got worse when the country gained its independence. The main causes of this issue are backwardness and population growth. Unemployment's socioeconomic effects are quite harmful. Both the individual and the society are affected economically. Manpower inactivity is a result of unemployment. It is the situation in which available labor has the skills and health to execute a task but is unable to find employment. In other words, unemployment is the state in which people are seeking job but are unable to do it. It is preferable to make a distinction between the terms "labor force" and "work force" when attempting to convey the concept of unemployment.
The number of people who are employed plus the number who are looking for work is referred to as the labor force. Children under the age of 15 and those beyond the age of 60, as well as those who are physically or mentally impaired, are not allowed to work in India. People who are really employed in economic activities are included in the work force. Workforce is subtracted from labor force to yield the unemployment rate. The number of unemployed people per 1,000 people who are employed is known as the unemployment rate. The National Sample Survey Organization (NSSO) in India uses three different concepts to estimate unemployment based on its quinquennial surveys.
They are Usual Status Unemployment, Current Weekly Status unemployment and Current Daily Status unemployment.
- Usual Status Unemployment (US): Here the reference period is 365 days. The usual status gives an idea about long- term employment (or chronic and open employment) during the reference year. A person is considered unemployed on Usual Status basis, if he/she was not working, but was willing to work for the major part of the reference year (more than 183 days) but did not get work for even 183 days.
- Current Weekly Status Unemployment (CWS): Here the reference period is one week .A person is considered unemployed by Current Weekly Status, if he/she had not worked even for one hour during the week, but was seeking or was available for work. The estimates are made in terms of the average number of persons unemployed per week. The Current Weekly Status approach gives an idea about temporary unemployment (or chronic plus temporary unemployment) during the reference week.
- Current Daily Status Unemployment (CDS): Here the reference period is each of the 7 days, preceding the date of survey in each of these days. It records the activity status of a person for each day of the 7 days preceding the survey i.e. persons who did not find work on a day or some days during the survey week.
Poor performance of Agriculture and Industrial Sector
The agriculture industry is still trailing behind and relies on outdated methods. Indian agriculture relies heavily on the monsoon season and has limited irrigation resources. Large portions of the population in India have smallholdings and dispersed holdings, which contributes to the agriculture sector's subpar performance even after the Green Revolution. Other factors include a lack of inputs, an exploitative system of land tenure, competition from foreign markets, a lack of storage and marketing facilities, and others. Not only is India's agriculture falling behind, but the country's manufacturing sector is also doing poorly. Despite significant advancements, contemporary development and industry have yet to have a significant impact. Slow industrialization of the nation is caused by a lack of innovative business owners, low competitiveness, a shortage of experienced and trained labor, insufficient funding, irregular power and raw material supplies, subpar transportation and manufacturing techniques, etc.
Price rise and Inflation vis-à-vis Poverty
By lowering the purchasing power of money, price increases and inflation are grave issues in many nations around the world, including India. The poor are the ones that suffer the most as a result of inflation and price increases. The purchasing power of money decreases at high prices, which causes the country's poorer regions to become more destitute.
Poverty Reduction and Development
Rapid For development and the reduction of poverty, economic growth is a requirement. It alters the low-income agriculture system, supports the government's efforts at redistribution, modifies the production and distribution process fundamentally, generates additional employment opportunities, etc. Even the possibility of a trickle-down influence on economic expansion exists. Because the bulk of the poor depend on the agricultural sector for their livelihood, accelerating agricultural expansion may help to lighten the burden of poverty. Therefore, measures should be implemented to address the issues facing small and marginal farmers. The rapid industrial growth may increase prospects for work and revenue for the populace while also perhaps lowering poverty. The growth of small-scale and cottage industries is crucial for boosting the rural economy. Small-scale and cottage businesses have been essential to the Indian economy since they are labor-intensive, increase employment opportunities, and aid in the fight against poverty.
Additionally, land reforms Initiatives to potentially remove the ancient feudal socioeconomic framework of land ownership have been lingering for a long time in India. By ensuring tenancy security and controlling rent, it seeks to end exploitation. Additionally, it strives to create a direct line of communication between the state and the cultivator and to provide the landless with social and economic status through distributive measures.
Providing inexpensive prices for necessities and bringing social amenities closer to the population helps lessen poverty by giving individuals more possibilities to access resources and services. In other words, government funds should be used to provide citizens with free basic services including primary education, healthcare, clean water, housing, and other amenities. They will feel better off as a result, which will boost their actual consumption and lower their level of poverty.
the status of women should be improved In many different ways, gender equality can contribute to lowering poverty and promoting prosperity. Direct membership in cooperatives, direct access to institutional loans, the creation of women's organizations, etc. are all given for women. To reduce the birth rate in the nation, urgent calls for comprehensive family planning measures will be made. Above all, the administrative apparatus must function well for any program to be successful. This means that it must be accountable, transparent, and responsible, and it must be devoid of corruption.
Summary
The blog makes an effort to present social aspects of poverty, starting with its regional, caste-based, and gender-based dimensions. The article also explored the key reasons of poverty in India, including inequality and unemployment, in detail. In addition to discussing inequality and unemployment, this session went into great detail into the poor performance of several industries, including agriculture and industry. The blog provides insight into the problems of rising prices, inflation, and the link between these factors and poverty. To give the students more information on the subject, this module also briefly highlighted the government's efforts to eradicate poverty through developmental measures.
Reference
- Banerjee , Abhijit and Duflo, Esther. 2011. Poor Economics: A Radical Rethink of the Way to Fight Global Poverty, New York: Public Affairs.
- Dandekar V.M. and N. Rath. 1971. Poverty in India, Economic and Political Weekly, 6(1 & 2) 104-146
- Dreze Jean and Sen A. 2013. An Uncertain Glory: India and its Contradiction, Princeton: Princeton
- Government of India.2014. Report of the Expert Group to Review the Methodology for Measurement off Poverty, New Delhi: Planning Commission.
- Himanshu. 2007. Recent Trends in Poverty and Inequality: Some Preliminary Results, Economic and Political Weekly, 42 (6): 497-508.
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